Gas prices hit record high for August

September could also produce record prices

Gas prices in August on average rose to $3.78 per gallon in Ohio and $3.80 in the region, the highest average prices ever recorded for the month, and the first monthly increases since March, according to a Dayton Daily News analysis.

Last month, the average price of a gallon of regular gasoline in Ohio was 12 cents higher than it has ever been in August, and it was 16 cents higher than any previous August in the Dayton-Springfield region, according to data from the AAA Fuel Gauge Report.

Rising fuel costs are tied to limited supplies resulting from refinery shutdowns and producers switching over to winter blend gasoline, experts said. The pain at the pump that intensified in August has not receded, and gas prices in the Miami Valley and Ohio are on track to set a new record for the month of September.

“It was the most expensive August for gas prices ever in the state of Ohio,” said Patrick DeHaan, senior petroleum analyst with GasBuddy.com. “It’s going to be really close, but September could be a record-setting month.”

Between July and August, the average price of unleaded gasoline in the state and the Dayton-Springfield region increased by about 34 cents, the largest spike in prices during that time frame, according to AAA records that go back to 2000.

The price hike occurred largely because refineries were operating at reduced capacities as a result of Hurricane Isaac, DeHaan said. Some Midwest oil refineries also had production problems, including a ruptured pipeline in a Wisconsin field.

“There have just been a lot of supply constraints,” he said.

Petroleum producers evacuated rigs and shut down operations in the Gulf of Mexico in preparation of the hurricane, and it takes time for production to return to full strength, experts said.

Refineries are also preparing to switch over to winter blend gasoline, and a slowdown in production of summer gas inevitably leads to a shortage that puts upward pressure on prices, said Cindy Atrican, spokeswoman with AAA Allied Group for the Miami Valley market.

“As they do the switch from one blend to another, there will be some issues with refineries in the Midwest, as far as the supply line goes,” Atrican said.

Supply problems in August pushed gas prices higher even than in August 2008, when the recession and hurricanes Gustav and Ike helped unleaded gas hit a then-record $3.66 per gallon in Ohio and $3.64 per gallon in the Dayton-Springfield region, according to AAA data.

September has the potential to set another new record.

The average price of gas in Ohio so far this month has been $3.84 a gallon, higher than the $3.63 average through this date in September 2008, DeHaan said. The average price of gas in the Dayton-Springfield region in September 2008 was $3.75 per gallon, a dime less than the current average.

“So far, this year is on par to have the most expensive gas in any September ever,” DeHaan said.

Gas prices are cyclical, and they usually peak in August and early September, because of production problems stemming from hurricanes, DeHaan said. Prices typically fall in October and November, because demand decreases with people traveling less, and they usually bottom out in December.

But Atrican said consumers should remember that gas prices are volatile, and a fire at a refinery or a geopolitical conflict could always send them soaring.

“There are so many factors that can affect pricing of gasoline,” she said.

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